Foundry for Crypto, a unique offering of the Palantir Foundry platform, takes aim at DeFi start-ups. As investors in Palantir, this excites us. We want to illustrate to our readers how this will power shareholder gains.
Web 3.0 is on the rise. Massive profits in the crypto markets by investors over the past several years are driving innovation as realized gains are reinvested into dApps and other Web 3.0 infrastructure. These innovations change financial and ownership paradigms by tokenizing assets and reducing friction in the financial system.
Palantir is a data company. A blockchain is a distributed ledger of transaction data. It is only fitting that Palantir extends data analysis and artificial intelligence offerings to cover the crypto economy. First mover advantage is critical in the rapidly evolving crypto economy to capture market share and scale. With Palantir's platform, start-ups can quickly enter the space.
Palantir advertises four critical features of its Foundry for Crypto software. First, it offers anti-money laundering AI. As nations develop regulations to govern the crypto space, Know Your Customer laws and other requirements will likely become more onerous. Companies that want to survive will need to quickly gain compliance. As early Palantir employees were former members of PayPal's fraud unit, this product-market fit makes sense.
Second, Foundry for Crypto offers real-time fraud detection. Essentially, this function seeks to reduce a company's risk to litigation and auditing. Suppose a criminal organization uses a company's product for fraudulent purposes. In that case, the ensuing legal battles and investigations could quickly derail company growth and progress. Look at the legal battle Ripple ($XRP) fights every day, forcing them to lose ground to competitors.
Third, Palantir's software stack provides dApp business intelligence. What does this mean? From what we can tell, users can gather and analyze data from their dApp to enable real-time decision-making about product launches, media campaigns, and governance. While we expected the first two, the governance functionality surprised us. While it could mean corporate governance, it also seems like a DAO enabling function. We will explore this in the future, as we are bullish on DAOs as a mechanism for commerce and governance.
Finally, Palantir advertises the offering as chain-agnostic. Automating the exploration and visualization of on-chain data is critical for understanding a blockchain and its constituent parts. The raw data is hardly palatable to the average person. As dashboards and analytic tools become more developed, users will gain tremendous insights and make faster, better decisions for their companies. Suppose customers create dashboards and analytics that track multiple chains concurrently and add new blockchains quickly and efficiently. In that case, they will better understand crypto markets. Knowledge is power.
The importance of understanding Web 3.0 in real-time extends to governmental organizations. As governments seek to understand and regulate the crypto world, they will need tools and methods that they cannot create due to a lack of expertise. Palantir can fill that gap in their capability just as it currently does in the intelligence and military services. Shareholders and users of the crypto ecosystem will significantly benefit if governments adopt Foundry for Crypto. Governments that understand Web 3.0 and its potential are less likely to institute draconian laws preventing open innovation in Web 3.0.
We follow Palantir closely today, because we believe that everyone else will try to copy or compete against their playbook within five years. Their ability to forecast the future and adapt accordingly holds lessons for the astute observer. Foundry for Crypto could be a cornerstone of their growth that goes parabolic over the next decade. We think that DeFi companies that use it will gain a competitive advantage in the fastest growing marketplace on earth. Read more of our Palantir analysis here.
If you are bullish on Palantir, consider investing through your brokerage.
If you are bearish, you can always short the stock.
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I am not a financial advisor. This article is for educational purposes only. You should do your own independent research before making any investment decisions.